Need Help With Financing Rehab
I have an opportunity to purchase a duplex in an up-and coming area. The cost of the Duplex is $160K, the cost for renovations is about 50K. Houses in the neighborhood are currently going for $210-$225K, so I know I will not immediately make any money,. My thoughts are to keep this property and rent it out. It is close to downtown Atlanta and properties in some of the surrounding areas are going for about $350. My question is. To do the renovations should I borrow for a conventional loan or should I do a hard money loan until the construction is completed and then get a conventional loan. Will a conventional mortgage company give me money to renovate?
Also, what is the best way to find a contractor that can give you ideas to make the house have curb appeal or do I need to hire an architect?
Why not just buy one in good condition? If you did that you could get a conventional loan. And save your self a lot of problems.
Hard money will not do what you want. Let me explain ARV 210 X 65%LTV = 136. Your purchase price is more than that.
I am going to be blunt in what I am about to say. You need to educate your self before you get burnt. Atlanta has a big RE investing group. Join it and go to a few meetings before you buy anything.
Thanks LA, I am a member of a REI group in Atlanta. I have been a member now for about 4 months, buy all new investors have to start somewhere, but before I do something to get burned, I am consulting seasoned investors on this forum and members of my REI group
Good advice. My gut was telling me this was not a good deal - the numbers did not work. But I let my desire to have this particular piece of property and the thoughts of eventually making big cash, get in the way of working the numbers.
Again Thanks[ Edited by investornewbie on Date 01/30/2006 ]